Do you owe city money? Champaign, Urbana join state program to collect unpaid fines, fees and taxes

Hundreds of people owe the cities of Champaign and Urbana money, and the cities are trying to collect.

Unpaid parking tickets, sanitary sewer fees, damage to city property ... over the years, it has added up to hundreds of thousands of dollars in unpaid bills to both cities, and now they are working with the state comptroller's office to find the scofflaws and call in their tabs.

The state comptroller, after all, signs off on payments to state employees and taxpayers who are owed income tax refunds, and a relatively new law allows the comptroller to withhold a portion of those payments and return it to the city to pay off a debt.

More municipalities around the state are starting to adopt the method, called a "local debt recovery program," and the results are starting to show.

The city of Chicago recovered $10.67 million from debtors, and around the state, the comptroller has returned $284,462 to seven other government agencies who are owed parking fines, school tuition, delinquent taxes or other debts. Lake Land College in Mattoon has collected on 999 debts worth $107,104.24, according to the state comptroller's office.

Champaign and Urbana already have adopted the program and are coordinating with Comptroller Judy Baar Topinka's office now to get the appropriate software running and the right data in place. They will be a part of the first dozen or so to join the program, but hundreds more entities have inquired about getting started.

The city of Danville is scheduled to run it past its public works committee this week, and then it could go to the full city council next week.

City administrators in C-U are not sure how much they'll get back, but the numbers could be lower locally than in other parts of the state. Champaign says it is owed $834,000, more than half of which is unpaid parking tickets.

If you're on that list of debtors, your name could be turned over to the state and entered into a database. When the state cuts a check, such as an income tax refund — or payroll if you're a state employee — the payee's name will be checked against that database.

If your name is flagged, the debt you owe — plus a $15 administrative fee — could be taken out of your check and returned to the city.

"This is certainly not the be-all and end-all, but it is we think a good addition to our collection tools," Champaign Finance Director Richard Schnuer said.

Urbana has adopted the program to collect only on parking debts totaling around $400,000 during the past seven years, according to city Comptroller Ron Eldridge.

Urbana is looking at it as a sort of "pilot" program, said finance office supervisor Beth Beaty.

"After looking at our outstanding (debts for other programs), we just didn't feel like we had enough to pursue it," Beaty said.

Schnuer said Champaign city staff members already go to some length to collect on debts. City officials can put liens on a property if its owner owes money for code violations, but that might not be paid until the property is sold, and that's assuming the owner has not abandoned the property.

There's always the option to take the debtor to court.

For parking tickets, city staff will always send a second invoice, Schnuer said. And for bigger amounts, they will sometimes call the debtor. But that's only effective to a point.

"There are hundreds of people who have $10 parking tickets, and if we spent all of our time trying to get a phone number to call, that's all we'd do," Schnuer said.

In the agreement the cities have made with the state comptroller's office, the local agency is required to make repeated attempts to collect before the debtor's name is turned over to the state.

"It's not just like people are going to get a parking ticket and then have money taken out of a paycheck or tax return," said Brad Hahn, spokesman for the comptroller's office.

There are conditions on what kind of debt can be collected. The outstanding amount must be at least $50 and no more than 7 years old, and the state can withhold no more than 25 percent of the amount of the check that was to be issued to the debtor.

And the debtor has an opportunity to appeal. When the debt database flags a name, the money owed is transferred into a trust fund for 60 days. The debtor is notified and given two months to challenge the action.

Hahn said the program is a "common-sense way" for local communities to collect on money they are already owed.

"This provides an avenue for communities to bring in revenue that they need without burdening taxpayers anymore," Hahn said.

Both cities have struggled to find new revenues as the economic recession has depressed key cash flows for governments everywhere. Decreasing property values have forced down property tax revenues. Sales tax revenues — the city of Champaign's biggest source of money — are just now beginning to rebound.

That has forced the cities to look to other sources to pay for big costs. Both Champaign and Urbana have adopted 4-cent gas taxes, and both plan to start billing property owners for a storm water fee within the next year or so.

The local debt recovery program is a way to find money while avoiding those kinds of increases on taxpayers who are struggling, too.

More than half the debt that Champaign city officials hope to collect through working with the state comptroller can be attributed to unpaid parking tickets. In Urbana, officials will only forward $400,000 in unpaid parking debt to the state for entry into the local debt recovery program.

Here is the Champaign breakdown:

Parking fines and fees

Amount owed: $421,000

Note: The city collects about $1.4 million annually in this category. The amount owed represents less than 5 percent of what has been collected going back seven years.

Multifamily recycling fees

Amount owed: $98,000

Note: The city is installing new software to make collection of this debt easier. City officials expect that much of this amount will be paid without incident during the next billing cycle.

Sanitary sewer fees

Amount owed: $141,000

Note: This fee is collected by the Urbana-Champaign Sanitary District but paid to the city. The collection rate on sanitary sewer fees is higher than 99 percent, and some of this amount is not yet past due.

Miscellaneous

Amount owed: $174,000

Note: This number includes nuisance abatements — like bills for property code violations — and other items like bills for damage to city property.